Global VC funding for Digital Health companies in 1H 2018 was 22 percent higher year-over-year (YoY) with a record $4.9 billion raised in 383 deals compared to the $4 billion in 359 deals in 1H 2017. Q2 2018 VC funding held strong at $2.4 billion in 196 deals following the $2.5 billion raised in 187 deals in Q1 2018.

Digital Health companies have now received $30.6 billion in the 3,833 VC funding deals Mercom has tracked since 2010.

Total corporate funding in Digital Health companies – including VC, debt, and public market financing – also set a new record at $4.4 billion in Q2 2018 compared to $3 billion in Q1 2018.

“Digital Health continues to grow at a record pace and is well on its way to smashing 2017’s record of $7.2 billion in VC funding.” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group. “The space is maturing and is beginning to get the regulatory attention it deserves. Simultaneously, the tech giants are boosting digital health in a big way. M&A activity was also up, and overall, it was a very robust first half of 2018 for digital health companies.”

Healthcare practice-centric companies received 29 percent of the funding in Q2 2018, raising $702 million in 58 deals compared to $1.7 billion in 74 deals in Q1 2018. Consumer-centric companies accounted for 71 percent of the funding in Q2 2018, raising $1.7 billion in 138 deals compared to $801 million in 113 deals in Q1 2018.

There were 49 early stage deals in Q2 2018, including six accelerator and incubator deals.

In 1H 2018, there were a total of 116 Digital Health M&A transactions, compared to 90 in 1H 2017. M&A activity in the second quarter of 2018 was also up with 68 M&A transactions (13 disclosed) compared to the 48 M&A transactions (13 disclosed) in Q1 2018.

mHealth App companies were involved in the most M&A deals in Q2 2018 with 11 transactions followed by Data Analytics with 10 deals. Practice Management Solutions, Telemedicine, and Wellness companies secured five deals each.

Prominent M&A transactions in 1H 2018 included: the acquisition of LifeScan for $2.1 billion by Platinum Equity, Flatiron Health acquired by Roche for $1.9 billion, Inovalon’s acquisition of ABILITY Network for $1.2 billion, Veritas Capital acquired General Electric’s (GE) Healthcare IT division for $1 billion, and the acquisition of Intermedix by R1 RCM for $460 million.